China threatens to withdraw £100bn UK FDI over Hinkley Point delay

Hinkley Point delay: The authorities in Beijing have used a strongly-worded article in the state-run Xinhuanews agency to indicate that it might pull as much as £100bn worth of investment out of the UK if Prime Minister Theresa May decides to cancel the Hinkley Point nuclear project. The British Government was jeopardising the ‘hard-won mutual trust with China’, the article claims, and suggest hat the ‘golden era’ of co-operation with Britain could be over, as the fall-out continues from Downing Street’s surprise decision last week to put plans for the £18bn deal under review until the autumn.If approved, the state-backed China General Nuclear Power Corp would own a 33% share of the new plant at Hinkley Point in Somerset; but this has now emerged as a sticking point with Downing Street which is concerned about the influence this could give Beijing in a key element of the country’s national infrastructure.Between 2000 and 2014 the UK was is by far Europe’s biggest recipient of Chinese direct investment followed by Germany and France: but the Hinkley Point affair would appear to back up predictions made in a report compiled by the economic research firm Rhodium Group and the Berlin-based Mercator Institute for China Studies last year that warned that surging Chinese investment would also require a change in attitude from recipient markets and their politicians to take full advantage of the opportunities and contain the risks.“Characteristics such as the size, growth and complementarity of the Chinese economy create unique opportunities for Europe,” the report’s authors said. “At the same time, some specific concerns that are related to the nature of China’s political and economic system, for example subsidies, China’s authoritarian political system and lack of openness.”